IBM finally conceded to Amazon Web Services on the construction of the CIA cloud, reports Federal Computer Week. This became a fun fight to watch when word leaked in March that the CIA had awarded the $600 million contract to Amazon.com, accepting a bid that was $54 million higher than IBM's.

As the report noted, "Big Blue had asked the court to halt contract work between the CIA and AWS while it considered an appeal. The government claimed in a subsequent court filing that an injunction and further delay on the contract would be harmful to national security." IBM is withdrawing, but it could be still in the running. However, it's clear that AWS has the green light to build a secret cloud for the CIA, and work will likely begin before the end of the year.

Protesting government contracts is common. The larger issue is the government's investment in cloud computing, and it's using megacontracts to access these resources.

The CIA deal is one of several federal cloud contracts now in place; the feds are deploying both public and private clouds. This should be good news for the taxpayers, as it could at some point reverse the government's addiction to data centers. Cheaper cloud computing should lead to reduced government spending and perhaps to better government services.

Of course, the feds' cloud movement has some rough edges. The recent failed launch of HealthCare.gov shows that, in many instances, the government and government contractors don't have a clue about how to build large, scalable systems on the open Internet. Even though HealthCare.gov uses public cloud services from Verizon, the system's launch was an utter failure.

The government needs to get smarter around the use of public and private cloud resources, and there is no substitute for experience. Now that the legal issues are out of the way for the CIA cloud, perhaps the feds can accelerate its overall adoption of the cloud.

David S. Linthicum is a consultant at Cloud Technology Partners and an internationally recognized industry expert and thought leader. Dave has authored 13 books on computing and also writes regularly for HPE Software's TechBeacon site.